I have a Limited company which has losses, all represented as Director's loans (for online retail business) - am looking to either use the Ltd company business for my book-keeping business or perhaps even just dissolve the Ltd company. Can I use the losses within that business to offset any of my personal tax or the book-keeping business if I move that into the Ltd co?
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
You cannot set the limited company losses off against personal, they're seperate legal entities.
Losses should only be carried forwards against the same trade, but, it all depends on how close to the new trade the old limited company was.
For example, management accountancy to bookkeeping could be argued as beeing part of the same trade as HMRC would accept that bookkeeping and accountancy are the same thing.
Coversely a change from a window instalation company to bookkeeping would not be.
That said most limited companies have the catch all anything for a profit line in their constitution and when you file your returns with companies house what businesses were part of the firms makeup as that too may be argued that it was the same trade.
The above is not an answer as its one of those cases where everyone's situation is a little different but hope that it helps until someone like Mark comes on with a better answer.
kind regards,
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Will depend on what the existing business of the Ltd company is. If nothing to do with bookkeeping then you cant offset the losses against the bookkeeping business if you incorporate it into the limited company as a totally different trade.
If you choose to dissolve the company then you get personal capital loss relief on the loan that is written off. Cant really do much with capital losses personally other than offset against capital gains or carry forward to be offset against future capital gains.
What would be better is if you convert the loan into shares then you may be able to claim income tax relief personally on the loss against income in the year or the preceding year under s574 ICTA 1988.
Best thing is to go and speak to a local accountant/insolvency practitioner who will be able to advise you of the options.
Hello Shaun and Mark Thank you for the responses. It is as I thought, although Mark I like the possibility of the convert to shares idea, so I will put a call out to someone locally and see how the land lies.
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
